FxWirePro- EURJPY Trade Idea

The EUR/JPY gained more than 400 pips on a strong Euro. It hit an intraday high of  159.92 and is currently trading around 159.87. The intraday outlook is bullish as long as the support of 158 holds.

The German debt brake reforms constitute a major fiscal policy shift, with conservatives and the SPD unifying to soften the debt brake to allow more defense spending and a €500 billion infrastructure fund to boost economic growth. The Bundesbank has proposed a stability-focused reform, suggesting that additional borrowing of up to 1.4% of GDP should be allowed if the debt ratio is below 60%. The euro has rallied in expectation of the move, reflecting investor expectations, but enacting the reforms requires a constitutional amendment and broad political consensus, which can be complicated by the composition of the new Bundestag

Technical Analysis:

The EUR/JPY pair is trading below the 34,55 EMA and 200-4H EMA in the 8-hour chart.

• Near-Term Resistance: Around 160 a breakout here could lead to targets at 160.25/161/161.50/162/163/163.60/164/165/166.65/167.
   
• Immediate Support: At 158.50– if breached, the pair could fall to 156.80/156/155.49/155/154.40.
  
  Indicator Analysis 4-hour chart):
• CCI (50): Bullish
• Average Directional Movement Index:  Bullish

Overall, the indicators suggest bullish trend

Trading Recommendation:

It is good to buy on dips around 156.25-30 with a stop loss at 155.70 for a TP of 158.